Investing in yourself and in a new business opportunity when times are tough might seem counterintuitive, but history and research show that those owners who remain steadfast in their convictions with regard to their business will come out stronger when the business climate turns positive.
The fact is, many small business owners run for cover during hard economic times, and make no mistake, the coronavirus pandemic is providing all the evidence we need that we are in for a rough ride. But to paraphrase an old advertising adage that applies to industries across the board, “When times are good you should build your brand. When times are bad you must build your brand.”
Is now a good time to invest in a franchise?
If you have a deep desire to excel on your own and have the money or the financing to invest, starting a new business via franchising can make a lot of sense.
An economic downturn provides an opportunity for those with the entrepreneurial spirit to shake free of the whims of the market as well as a lack of career growth in their present jobs. With a franchise, you’re not starting out on your own. You’re buying into a proven business model that is already established and showing success. If you’re an entrepreneur who’s come to re-think the supposed safety of employment, and you’ve arrived at that point in your life where you’re ready to take life by the horns and start a business of your own, a franchise might be the way to go.
There are many franchise types to choose from in many different industries, but if you’re starting out with your first franchise one key recommendation would be to start with a low-overhead cost business. That means, choose a business that requires little physical space, little capital expenses, and one that has limited competition. If you are the only pizzeria in town, chances are you are also busy in a recession. However, if it’s your plan to become the tenth pizzeria in town, you better have a Plan B because you’re setting yourself up for failure.
Ideally, you should pick a business that has a high portion of labor cost in the final product. If you start a business that has a large portion of purchased products in the final cost of the sale, chances are you have to invest in a lot of inventory, and/or are working on low margins. The risk of carrying lots of inventory when a recession hits is tremendous, and it is often the reason why many companies have had to close their doors when the business climate turns negative.
It’s also good to be four-seasons flexible. Consider, for instance, a business that has many applications and different types of customers: such as a company that can serve residential and commercial customers. This kind of business will be more resilient than one that just serves one or the other. The same goes for products. A business that makes or sells a menu of different products will be more resilient than a business that sells only one or two.
But is a recession the best time to start a business?
It can be. And there are several reasons why. For example, whether your business is new or established, it’s smart business to either introduce your company name or keep it visible in the market during a slowdown. As this article in Forbes discusses, the “noise level” in your business category can go quiet when competitors cut back on their marketing. Consequently, if you’re a new business owner, that’s the perfect time to establish your name and to show stability while others go into marketing hibernation. By increasing your share of voice during a downturn you can increase your share of market once the economy rebounds, leading to an increase in profits.
As a new business owner, you’ll also find that the cost of promoting your business is less expensive during a “buyer’s” market. Whether you decide to use digital, paid search, local direct mail such as Every Door Direct Mail (EDDM) from the USPS, or other media outlets, studies show the cost of advertising drops during recessions. If you’re fairly aggressive, these savings can give you a leg up on competitors who may have withdrawn to ride out the recession.
Explore RenuKrete, a franchise opportunity with a proven track record
A RenuKrete® franchise is a business opportunity that you can start with little capital investment, low overhead and a large portion of labor cost in the total cost of the product. To top it off, RenuKrete® is a proprietary technology in the engineered concrete flooring space that serves multiple types of customers and applications. If you have been thinking about owning your own business for a while, now might be the right time to join a winning team that allows you to determine your own success. RenuKrete® franchisees enjoy the exclusivity of being the only businesses in their service areas with the technology and equipment to restore new life to old concrete surfaces with engineered concrete flooring. For interested prospective franchisees in Connecticut, Florida, Kentucky, Massachusetts, Ohio, Pennsylvania, and Texas who’d like to discuss franchising opportunities with RenuKrete®, call (800) 406-5010.